Recent Court Decisions in RPA Lawsuits

Recent Court Decisions in RPA Lawsuits

Last Update: October 24, 1999

There are only 12 RPA decisions in the entire United States containing the year 1997 somewhere in the decision (and some of such decisions were decided in 1996). This does not mean that there were only 12 or fewer RPA lawsuits in the whole United States during 1997, because only a small percentage of all filed cases of any type get reported (with a published decision) for the world to see.

During 1999 (through October 23rd), there were 34 federal decisions citing the Robinson-Patman Act, including one important Supreme Court decision (Strickler v. Greene, 119 S. Ct. 1936, 1999 U.S. LEXIS 4191) decided June 17, 1999, in which the dissenting opinion pointed out that "the level of threat of injury to competition needed to make out a claim under the Robinson-Patman Act" is a "reasonable possibility"); 12 decisions by various U.S. Courts of Appeals; and 21 opinions by various U.S. District Courts. Clearly, there is an increase in Robinson-Patman Act activity in the federal courts.

From January 1, 1990 through October 23, 1999, a total of almost 10 years, there were 401 federal decisions referring to the Robinson-Patman Act: 7 by the U.S. Supreme Court; 106 by various U.S. Courts of Appeals; and 288 by various U.S. District Courts. There are many more cases brought under the Robinson-Patman Act than there are published decisions referring to such cases, because only 1 out of perhaps 20 cases (and I am guessing on this one) results in a published decision.

For persons interested in auto parts litigation, 13 decisions out of the 401 federal decisions during the 1990's referred to auto parts or automobile parts.

A brief summary of some of these cases and other cases follows:

In Yeager's Fuel, Inc. v. Pennsylvania Power & Light Co., 1997 Dist. LEXIS 1134 (E.D.PA. 1/27/97), the district court held that electric power was a commodity for purposes of the Robinson-Patman Act (and Clayton Act), thereby requiring the sellers of electric power not to unlawfully discriminate in price. The court mentioned that other cases had already come to the same conclusion. Under the RPA, there is no prohibition unless the seller is selling a commodity of like grade and kind. The sale of services (such as legal services and office temporary services) is not covered by the RPA.

In Hygrade Milk & Cream Co. v. Tropicana Prods, 1996 U.S. Dist. LEXIS 6598 (S.D.N.Y. 5/16/96), the court upheld (in a lengthy, 46-page decision) a variety of RPA claims by a milk and orange-juice wholesaler against an orange-juice manufacturer, and dismissed various RPA claims (and some of the plaintiffs, for alleged lack of damages) as well. Please note that the decision discusses what the parties contended in their respective motion papers, and all statements of fact or alleged fact in the decision should be considered only as allegations, and not as fact. The decision contains a substantial amount of RPA discussion, and can be seen or downloaded at 46-Page Decision in Hygrade v. Tropicana. The editor of RPAmall was a lawyer for the plaintiffs in that action.

In American Booksellers Ass'n, Inc. v. Random House, Inc., 1996 U.S. Dist. LEXIS 12775 (S.D.N.Y. 9/4/96), the district court held that an association could represent its members (book retailers) who sought declaratory and injunctive relief (but not monetary damages) under the RPA against various book publishers for alleged price and service discrimination.

In Cardinal Industries, Inc. v. Pressman Toy Corp., 1996 U.S. Dist. LEXIS 18714 (S.D.N.Y. 12/17/96), the district court dismissed an RPA claim by one game manufacturer against another because the plaintiff did not allege that the discriminatory prices were below the defendant's cost (and therefore predatory).

In Chroma Lighting v. GTE Prods Corp., 1997 U.S. App. LEXIS 6642 (9th Cir. 4/10/97), the Court of Appeals held that in a secondary-line RPA case, the Supreme Court's Morton Salt presumption that competitive injury to individual buyers harms competition is irrebutable and may not be disproven by the defendant.

Primary line competition is at the level of the seller of the goods, usually the manufacturer. Secondary-line effects to competition occur at the level of the customers who purchase from the seller (which customers are wholesalers or retailers). And tertiary-line effects occur at the level of the persons who purchase from the secondary-line competitors, who are usually the consumers of the product. Thus in the Chroma case above, the court held that when persons who buy from the seller are involved (the secondary-line instance), the presumption that competitive injury to individual buyers (from the seller) harms competition at the secondary level which presumption may not be rebutted by the seller-defendant. This decision makes it easier for the plaintiff by not permitting the defendant to disprove the plaintiff's showing (through injury to a buyer) that competition has been injured.

If you think this is complicated, you are right. This is an example of how the courts have taken a simple statute and have engrafted all sorts of conditions and exceptions onto it to make it more difficult for an injured plaintiff to recover damages.

In Anti-Monopoly, Inc. v. Hasbro, Inc., 1997 U.S. Dist. LEXIS 3775, the district court granted summary judgment against the plaintiff and dismissed its complaint.

The editor of RPAmall is the attorney for Anti-Monopoly, Inc., and represented Anti-Monopoly in the earlier extended trademark litigation (during the 1970's and 1980's) between Anti-Monopoly, Inc. and Hasbro's predecessor, Parker Brothers.

The plaintiff, a small game manufacturer (with sales of millions of units in the aggregate over a period of year, but now down to about $2,000 in sales per year), presented evidence that Hasbro was monopolizing the U.S. market for family board games with a 70% market share, which share was acquired by a series of board-game company acquisitions (including Milton Bradley, Parker Brothers, Western Publishing assets, and others). Also, the plaintiff made an evidentiary showing that Hasbro had extended its monopoly to the large retailers through agreement and conspiracy, and sharing its monopolistic profits (through highly discriminatory pricing and advertising programs) with such large retailers, which gave the large retailers no incentive to buy any competing games from Anti-Monopoly or others.

The Anti-Monopoly case is on appeal to the Court of Appeals for the Second Circuit to try to obtain a reversal of the district court's decision. All briefs have been filed and the parties are awaiting oral argument.

If anyone is interested in filing an amicus brief in support of Anti-Monopoly's position, please communicate with attorney Carl E. Person, tel. 212-307-4444 or fax to 212-307-0247. There would be no out-of-pocket expenses involved for the persons who come to Anti-Monopoly's assistance.

A recent Robinson-Patman Act case is The Iamsco v. Falduti d/b/a Countryside Feed and Supply, 1997 U.S. Dist. Lexis 10049, 1997-2 Trade Cas. CCH Para. 71,870 (E.D. MO, Eastern Div. 1997) (42K file, no graphics) The Iamsco RPA Case Lost by the Small Business Counterclaimant Defendant Falduti's antitrust counterclaims under the Sherman Act and the Robinson-Patman Act were dismissed by grant of summary judgment (meaning, without any trial), for reasons explained in the decision. The decision is worthwhile reading because it shows some of the numerous hurdles imposed by the courts upon antitrust plaintiffs, hurdles which usually are too much to overcome. The plaintiff to often, it seems, gets tripped up by one or more of the "100 Hurdles".